Deckers Outdoor Corp. v. ShoeScandal.com LLC

When determining the amount of damages that was appropriate for patent infringement where the infringing party failed to respond to the proceeding, the court used the median average industry profits to determine pre-interest damages.

Opinion (Wright): Deckers Outdoor Corp. ("Deckers") sued ShoeScandal.com, LCC ("Shoescandal.com") alleging that ShoeScandal.com's products infringed Deckers' design patents. ShoeScandal.com failed to appear and Deckers received a default judgment of infringement and injunctive relief, but its request for damages, in the form of ShoeScandal.com's profits from the sale of infringing items, was denied because the evidence Deckers provided was too speculative. Deckers filed a renewed request for a damages award and submitted evidence of ShoeScandal.com's revenue from the sale of infringing items and evidence of average industry profits from similar sales, because a patentee may elect to recover damages in the form of the infringer's profits from the sale of infringing products. When the infringed patent is a design patent, the patentee may not recover damages in both the form of a reasonable royalty and the infringer's profits. Where a party is absent from the proceedings, the court must balance the concerns of fairness to the absent party and the risk that minimizing damages could encourage future infringement. The court found that Deckers' evidence of ShoeScandal.com's sales and the evidence of average industry profits were sufficient to support an award of damages. Using the median of the range of average industry profits submitted by Deckers, the court awarded Deckers $107,226.99 in pre-interest damages, 45% of ShoeScandal.com's sales of infringing products. The court has discretion to award pre-judgment interest in design patent infringement cases. The interest rate for pre-judgment interest is the prevailing interest rate for Treasury Bills unless substantial evidence shows a different rate is appropriate. The court exercised its discretion and AWARDED Deckers an additional $14,913.22 in pre-judgment interest, as well as post-judgment interest at a rate of 9.8%, computed daily until the damages are paid.